Schmidt, the former chief of Volkswagen's environmental and engineering center in Michigan, was arraigned Thursday in U.S. District Court in Detroit on charges of conspiracy to defraud the United States and violating the Clean Air Act. A third charge of aiding and abetting wire fraud was rolled into the conspiracy charge.

The German-born executive appeared in a burgundy prison uniform and stood mute to the revised charges. Magistrate Judge David Grand entered a not-guilty plea on Schmidt's behalf.

Schmidt faces maximum penalties of up to five years in prison and/or a $250,000 fine on the first charge; and up to two years in prison and/or a $250,000 fine for the second.

Schmidt was originally charged with 11 felony counts and federal prosecutors said at the time that he could face a maximum of up to 169 years in prison.

Federal court officials last week reported that Schmidt had decided to agree to a plea deal, details of which are expected to be released Friday.

In March, Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve U.S. charges it installed illegal software in thousands of vehicles to evade diesel emissions rules.

Volkswagen has agreed to spend as much as $25 billion in the U.S. to resolve claims from owners and regulators over polluting diesel vehicles and offered to buy back about 500,000 vehicles.

Schmidt, who was chief of Volkswagen's environmental and engineering center in Michigan, has been held since January when he was arrested in Miami trying to return to Germany.

It wasn't clear whether Schmidt is still employed by the company. He has been in custody since his arrest and was denied bail.